Many small-cap stocks have limited Wall Street coverage, giving savvy investors the chance to act before everyone else catches on. But the flip side is that these businesses have increased downside risk because they lack the scale and staying power of their larger competitors.
The downside that can come from buying these securities is precisely why we started StockStory - to isolate the long-term winners from the losers so you can invest with confidence. Keeping that in mind, here are two small-cap stocks that could be the next 100 baggers and one that could be down big.
One Small-Cap Stock to Sell:
Luxfer (LXFR)
Market Cap: $413.8 million
With its magnesium alloys used in the construction of the famous Spirit of St. Louis aircraft, Luxfer (NYSE: LXFR) offers specialized materials, components, and gas containment devices to various industries.
Why Is LXFR Not Exciting?
- Annual sales declines of 2.8% for the past two years show its products and services struggled to connect with the market during this cycle
- Projected sales decline of 3.6% over the next 12 months indicates demand will continue deteriorating
- Earnings per share lagged its peers over the last five years as they only grew by 1.3% annually
Luxfer’s stock price of $15.70 implies a valuation ratio of 12.4x forward P/E. Dive into our free research report to see why there are better opportunities than LXFR.
Two Small-Cap Stocks to Watch:
Celsius (CELH)
Market Cap: $7.71 billion
With its proprietary MetaPlus formula as the basis for key products, Celsius (NASDAQ: CELH) offers energy drinks that feature natural ingredients to help in fitness and weight management.
Why Could CELH Be a Winner?
- Remarkable 56.1% revenue growth over the last three years demonstrates its ability to capture significant market share
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable three-year growth trajectory
- Earnings per share grew by 215% annually over the last three years, massively outpacing its peers
At $30.28 per share, Celsius trades at 17.1x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Acuity Brands (AYI)
Market Cap: $8.48 billion
One of the pioneers of smart lights, Acuity (NYSE: AYI) designs and manufactures light fixtures and building management systems used in various industries.
Why Are We Fans of AYI?
- Annual revenue growth of 9.1% over the last two years beat the sector average and underscores the unique value of its offerings
- Offerings are difficult to replicate at scale and lead to a best-in-class gross margin of 45.1%
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 17.8% exceeded its revenue gains over the last five years
Acuity Brands is trading at $281.33 per share, or 14.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it's flagging for this month - FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
